Even the most bitter feuds with President Donald Trump appear to end with the art of the deal.
The US government recently signed a deal to place Elon Musk’s Grok AI inside federal agencies for 42 cents per agency—a “unique” deal that could reset Musk’s tense relationship with Trump and reshape the fight over which models dominate Washington.
It’s the latest in a series of agreements made by the United States General Services Administration (GSA), the agency in charge of technology procurement, with the top AI companies—Alphabet’s Google; OpenAI, the maker of ChatGPT; and Anthropic—as part of its new OneGov initiative. Each of these contracts is short-term (to prevent one model from dominating, according to the GSA), but Grok’s is the longest, lasting 18 months. On September 22, the GSA announced that it would collaborate with Meta to gain free access to its Llama models, while OpenAI and Anthropic agreed to provide their models for $1 each, and Google charged 47 cents.
According to the Wall Street Journal, Musk chose 42 cents to reference the science fiction novel The Hitchhiker’s Guide to the Galaxy.
It’s difficult to calculate how much money Musk is saving the government by offering the model for only 42 cents per unit; xAI’s Grok 4 Fast is priced per output, and agencies may be liable for significant API licensing fees.
“We really like the notion of having strong competition and market tension between these models and these companies,” Federal Acquisition Service Commissioner Josh Gruenbaum told the Wall Street Journal in an interview. “When someone goes and updates their model with a cool feature, that only encourages the others to go do the same thing.”
Musk-Trump relationship
The deal could indicate that the tumultuous Musk-Trump relationship is thawing. Musk has become one of Trump’s most vocal critics since breaking with him in June over tariffs and spending, even calling for his impeachment. However, on Sunday, the two were seen together at Charlie Kirk’s memorial in Arizona, shaking hands and chatting for the first time since their public split.
Musk is now praising Trump’s leadership in official press releases, stating that xAI anticipates “rapidly deploying AI throughout the government.”
Whether this is a fragile truce or a genuine thaw, the timing is striking: Musk is still struggling to keep up with rivals like OpenAI and Anthropic in the private market, but inside Washington, he has just received a coveted stamp of approval.
“MechaHitler” in the government?
Musk’s agreement with Washington follows a series of embarrassing stumbles for Grok.
The chatbot has been caught making anti-Semitic comments, referring to itself as “MechaHitler,” and even hurling slurs at Poland’s prime minister. xAI cleaned up the posts and promised tighter safeguards, framing the errors as part of the messy process of training frontier AI.
“We are aware of recent posts made by Grok and are actively working to remove the inappropriate posts,” the company stated at the time, adding that its large user base helps flag blind spots so the model can be retrained quickly.
According to news site FedScoop, more than 30 advocacy groups urged the Office of Management and Budget to keep the model out of federal systems, while several Democratic lawmakers pressed the GSA on its decision. A GSA spokesperson has stated that the agency evaluates all vendors “equally” and that no single deal constitutes a final endorsement.
